The United States Dollar, COVID-19, Euro, and Swiss Franc

Let’s check the market. Dollar fell. Nevertheless, it stabilized after the Federal Reserve rate cut. Central banks are rushing to restore confidence in markets. However, investors fret over an economic hit from coronavirus.

The fears about COVID-19 trumped central bank efforts for easing the pain. The dollar stood tall despite the United States Federal Reserve slashed rates to zero. Thus, on Monday Japan’s yen surged 2% with traders seeking cover in safe-haven currencies.

On Sunday, the Federal Reserve cut United States rates. Afterward, the Federal Reserve said that it would expand its balance sheet by at least $700 billion in the coming weeks.

Meanwhile, the Bank of Japan said at an emergency meeting, it will be more commercial debt, corporate bonds, and establish a new corporate lending scheme. New Zealand’s central bank also slashed rates as an emergency move.

Traders bothered about the growing number of Covid-19 cases worldwide. Thus, on Monday, the markets of equity collapsed again.

Dollar and Others

The degree of the moves was not as large as last week. Nevertheless, in Forex, investors dumped riskier currencies and bought into those which they considered safer.

MUFG analysts forecast that policymakers might reduce volatility. Nevertheless, the ultimate determinant will, of course, be evidence that COVID-19 is peaking.

Against the yen, the dollar dropped 2% to as low as 105.70. Nevertheless, it was still above last Monday’s 101.18 yen.

The Swiss franc is another currency considered as a safe-haven. Versus the dollar, it rose with the dollar down 0.6% at 0.945 francs. Versus the euro, the franc was unchanged at 1.055 francs but near four-and-a-half-year highs.

Measured against a basket of currencies, the dollar was last up 0.1% at 97.95, of the day’s highs. It was falling as traders sold because of collapsing Treasury yields. Nevertheless, the United States currency rebounded the past week. It was because the investors stocked up on the world’s most liquid currency.

It is the leading news of the market.